Skip to comments.BofA chief: We have a 'right to make a profit'
Posted on 10/06/2011 9:22:39 AM PDT by tobyhill
Bank of America's CEO defended his bank's new $5 fee on debit cards on Wednesday, saying that customers and shareholders understand the bank has a "right to make a profit."
Bank of America (BAC, Fortune 500) CEO Brian Moynihan defended the move, which the bank announced last week in response to new caps on debit card swipe fees that the banks charge retailers.
Bank of America's announcement of a new debit card fee was followed today by an announcement of new checking account fees by Citibank (C, Fortune 500). These new bank fees have fueled a populist backlash that has coincided with a series of protests against Wall Street banks around the nation.
Moynihan stopped short of criticizing President Obama who earlier this week said to ABC that banks don't have an "inherent right" to a "certain amount of profit."
But BofA's chief did say banks have an inherent right to make a profit in an interview Wednesday with CNBC's Larry Kudlow at the Washington Ideas Forum, sponsored by the Newseum, the Aspen Institute and the Atlantic magazine.
"I have an inherent duty as a CEO of a publicly owned company to get a return for my shareholders," Moynihan said.
(Excerpt) Read more at money.cnn.com ...
When you refused to take a loss and instead had the taxpayers bail you out, you forfieted that right to have a profit. You are now under the socialist umbrella and you put yourself there.
And we have a right to take our business elsewhere.
However, BofA has NO RIGHT to our tax dollars ... something Obama appears to not comprehend.
And they are expected to make a profit for their shareholders. An inconvenient truth for the little teeny boppers on Wall Street.
Bank of America GO MAKE MONEY!
B of A can’t even keep their on line banking running any longer.
Someone tell this son of a bitch there are tens of millions Americans who are just struggling to keep a damn roof over their heads, millions of others losing everything.
Where are their bailouts Mr. Moynihan? Ya stinking little criminal...
Yes,”Go MAKE MONEY” but don’t expect real taxpayers to bail them out if they don’t.
I hope everyone of those idiots on Wall Street post their pictures somewhere because when they go out to find a job they can be disqualified. No company wants to hire someone that doesn’t believe in making that company a profit.
I am a customer of Bank of America. In a recent poll, 70% of the customers of BoA claimed they will leave the bank if the $5 per month fee were to be implemented. You encouraged me to leave BoA when you took the floor of the Senate in your recent errant statements. I am NOT one of those customers who will leave the bank. But I am looking to you to make this right.
I will give you the benefit of the doubt. Maybe you were not aware of the unintended consequences of your amendment which led to these fees. If that is the case, you can reverse or correct this error by changing the law. Please do so expeditiously.
If you were aware of the impending fees, and you wanted BoA to lose customers or somehow punish this bank, that is shameful, and you owe BoA and its customers an apology.
So, which will it be? Will you correct your mistake, or will you stick to your opinion that your amendment was helpful? If you think the amendment was helpful, which will lead to BoA going out of business, it will also punish small businesses who may lay off employees while trying to calculate razor thin profit margins due to more bank fees.
Please keep in mind that Congress often does not think through the unintended consequences, and that the American people will always react to poor decisions by Congress.
Please make this right.
....I know...I was too kind....
"Wall Street reforms" - nice subtle way use of the language to fit the agenda of making the banker out to be the evil capitalist stomping on the heads of the downtrodden.
He’s absolutely right but I suspect every PR professional in America did a double facepalm at hearing the statement.
This is all because Obama just changed the laws. The banks used to collect a merchant fee from the vendors where you used your debit card, just the way credit card companies do. It’s a processing fee, and somebody’s got to pay it.
Obama said that they cannot raise the fee to the merchant or collect enough to pay for the service anymore. So guess what? They’ve got to get paid for this service somewhere, and who else are they going to get it from?
He should be calling attention to the fact that Obama is directly responsible for this by preventing the banks from charging the merchants (as they used to).
This is another thing we have to thank Obama for, but as usual, he is adept at avoiding the blame (although many people warned that this would be the result).
Blame Obama for this latest fee.
Banks borrow almost free.
Credit card interest rates do not go down.
More margin of profit results.
Go local or bury it in the back yard.
“Hes absolutely right but I suspect every PR professional in America did a double facepalm at hearing the statement.”
Well if that is indeed the VERY sad case, it is because the Communist media has, over the course of decades, convinced the economically ignorant that honestly obtained “profit” is an obscene and evil concept.
Better research the history here.
Banks were forced to play along or face Federal sanctions.
Wells Fargo tried saying “no thank you” and Obams said “But I insist”.
Irrespective of that history, Obama is in no position to impose wage and price controls.
Dodd/Frank attempted to limit per transaction fees at the point of sale, so the banks are covering that cost elsewhere.
In fact they are under no obligation to take the cost from profit.
If you don’t like it, try finding another bank that won’t have these fees by year end.
(somehow, I manage to survive without using a debit card for purchases)
If you’re forced to take a pay cut or get laid off, do you simply accept a change in lifestyle or income?
No! You find a way to compensate for the impact.
weird isn’t it how this pro queer cross dressing liberal biased media never seems to tell the public the reason for the fees , oh like more regulations by the left.
Zero just said that they have a right but it’s not nice.
I still claim that the dumbest voters this country has ever produced is the American idol zero voters, they know nothing about this man and yet voted for the fool while the media dressed him up and made him out to be a superstar.
Well, you could do that, too...
But for people who want to continue to use credit cards and debit cards, somebody has to pay that fee, and now it’s the consumer rather than the merchant. If Obama would stop messing with the banks (which he obviously does not understand), a lot of their problems would be solved. He has consistently screwed things up.
This law just went into effect a few days ago, so you can see how fast the screw-up effect is felt.
You have that right until you take TAXPAYER funds. Then you become the property of the public. Ask Bell Canada how that is working out.
You got in Bed with the Fascist Rapist. don’t B***h about losing your virginity.
Sorry, y’all. BOA was FORCED to take the money, if you recall. And paid it back early and in full.
Its disingenuous to now fault them for taking it and especially to claim that since they took it they forfeited their right to run their business as they see fit in perpetuity, or whatever.
That said, BOA does have the right to make a profit and can charge whatever they think the market will bear. I do NOT, however have to see what they charge as fair and I do not have to pay it.
We are not taking about Wells Fargo, we are talking about Bank of America. B of A had their hand out and would have gone bankrupt if not bailed out and they still might go bankrupt. For some reason, they let Lehman Brothers and Bear Stearns go belly up, yet the some got bailed out. Probably a connection with Bernanke and/or Paulson. Now we are bailing our the Europeans as well. The whole thing makes me sick. The protesters have the underlying idea right, but what we need is free market capitalism, not communism or crony capitalism (what we currently have). Frankly, I don’t care what Obama does to Bank of America. I have already written them off as another government institution because that is what they have become.
“But not now”
Your gripe for past sins have no bearing on whether BofA charges a fee to compensate for Dodd/Frank’s ill conceived regulation.
Fine. And we have the right to take our business elsewhere.
No they don’t. I couldn’t care less if the charge the fee or not. I don’t have an account with them. My gripe is with bailing their asses out, them turning the money in my pocket into worthless paper, then they say they have a right to profit. They do not.
Competition should solve this...if only government would stop the stupid regulation.
The problem with this stuff is simple. The regulations that may actually have done some good (like some parts of Glass-Steagal) have been eliminated, and those that simply cause problems (the Durbin Amendment as an example) are passed like they are from God Himself.
You are so right.
I see, and how do you plan on constraining their right to a profit?
There are several companies that should have gone bankrupt rather than be bailed out at taxpayer expense, such as GM.
Would you feel better if they all just shut down tomorrow and turned their bank accounts over to Obama?
Cuz you know he’d just send you a check for your “fair share”......
It may be a parsing of words, but I don't think any individual or entity has a "right" to "make a profit." We have the right to (try and) earn a profit, and while the words may have very similar implications, I think the choice of one word over the other ('make' vs. 'earn') reflects a profound fundamental difference in outlook.
What an idiot. No business has a right to make a profit. They have the right to *try* to make a profit, and to shut down if they consistently fail.
How have so many nincompoops risen to such high positions in this country? It’s truly bizarre.
I’ll ammend: They have a right to try to earn a profit...and as much profit as the market will bear.
I don’t believe in bail-outs. That is totally not the capitalist way. Blame that on Bush, and later, on Obama.
But we are a capitalist society. Everyone should go make money.
Not only do they have to right to a profit, BOA has an obligation to its investors to turn a profit. If a customer does not like how that profit is made, or the size of the profit, they have the right to do business elsewhere. Any statements to the contrary are the results of a retarded thought process from a conservative point of view.
I should clarify; it should read “the right to attempt to make a profit,”
And when a bank trying to make a profit fails, it has no right to expect a bailout.
All of this erroneous thinking by CEOs is what put the us in the swamp we now find ourselves. Too bad US education failed so miserably!
Do something useful. Go demonstrate at the Board of Education and get rid of unionized education instead of haunting Wall Street.
“Obama said that they cannot raise the fee to the merchant or collect enough to pay for the service anymore. So guess what? Theyve got to get paid for this service somewhere, and who else are they going to get it from?”
So tell me, just who do the consumers think were paying these fees before? Just like corporations passing along taxes to the consumers, the banks, loosing the ability to charge the businesses (who were just passing the costs along to the consumer), now just charge the consumer directly. I hate BofA as much as the next guy, but this isn’t their problem. The Marxist/Demorats are to blame. It’s just more of the same old class warfare bullshit! They think that they can keep selling the free lunch. The “poor consumer” is getting screwed. I don’t think so. He’s just now getting to actually see what he’s been paying for all along. So go ahead and leave BofA, but do it for the right reason.
I have an account at B of A. I consider the use of my debit card and online bill pay a service. They have made capital investment and pay labor to provide the convenience to me; I don’t have to wait in line to cash a check, I don’t have to write checks and pay postage to pay bills, etc.
He will rue the day he said that.
It is becoming crystal clear. Democrat strategery in 2012 will be to run against the banks. They will run on promises of heavy regulation of fees and interest, controls on speculation, and will promise banker perp walks.
And heaven help the banker who tries to tell the Sheeple that things are getting worse and it’s government’s fault.
B of A will back down from this or suffer the consequences.
Their decision is as ill-timed as anything could possibly be.
What is the cause/effect connection between the two ? If BA doesn't make a profit, somehow all these struggling Americans will do better ???
No, the opposite is true: if BA doesn't make a profit, then they lay off 30,000. If it gets too bad, they go under, and then even more Americans are struggling.
That’s well and good. They’re not ‘making’ a profit off you; they’re ‘earning’ a profit from you by providing a service for a fee that you’re willing to pay. Nothing wrong with that. They don’t have a ‘right’ to that profit, they do have the ‘right’ to solicit your business and enter an agreement with you to provide services at rates you’re willing to pay. They earn their profit based on that agreement to which you concur and assent. There’s no ‘right’ or entitlement they have to your money, until you voluntarily relinquish it based on your service agreement with them.
That is not the point, of course you know that. The point once again, just for you, is American taxpayers were force to bail out these banksters, corrupt Wall Street insiders and fatcorps. All while these same entities seize the assets and properties of those who were forced to bail them out.
It's like you going broke due to bad decisions, but instead you rob me at gun point to save your a$$.
Apparently, you think this is all perfectly legitimate and capitalism at it's best.
I only wish he would have added “... and just who is paying for all these unemployed leeches on society to foul our city?”
This fee was being discussed long before that legislation was passed. They just used it as an excuse now. You give BoA too much credit.
The point of sale cost/fee before Dodd/Frank was about 20 cents/transaction.
So the $5/mo. only offsets about 25 transactions.
If you don’t like it, don’t use it.
I live fine with out it.
Maybe BoA execs refused to pay Durbin's "tribute."